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Turquoise logo8.gif
Founded 2008
Headquarters London
Key People David Lester, Chairman; Robert Barnes, CEO
Products European equities trading platform
Website tradeturquoise.com

Turquoise is a European equities and derivatives trading platform for on-exchange and off-exchange execution, backed by investment banks in an effort to cut transaction fees from established venues. The London Stock Exchange, a former rival, acquired a 51% stake in Turquoise in February of 2010.[1] [2] In July 2013, LSE increased its stake by purchasing Turquoise's derivatives platform and renamed it the LSE Derivatives Market.

Products and Services[edit]

In May 2009, Turquoise announced TQ Channel, a new service that aggregated large orders and routes them out to other trading venues. The service was designed to combat increasing fragmentation in European equity markets. It will provide a single point of access to dark pools operated by banks and specialist brokers for its members. It is set to launch in early July 2009.[3]

In June 2010, Turquoise’s mid-point only dark book traded €4.305 billion, becoming the top European dark pool for the first time on a monthly basis. Turquoise narrowly beat Chi-Delta, the dark MTF operated by Chi-X Europe, which traded €4.3 billion.

Some market observers have credit increased buy-side interest in Turquoise to a Themis Trading white paper titled "Data Theft on Wall Street," released in May 2010. The paper suggested that high-speed data feeds from US exchanges including BATS Exchange and Nasdaq OMX reveal information about hidden order flow, such as buy and sell indicators and cumulative executions of hidden orders, which could be exploited by high-frequency traders. Turquoise issued a response offering assurances that its data feeds do not contain potentially sensitive execution information. The next day, trading on the European dark pools operated by Chi-X and BATS Europe fell, with some sell-side firms reporting that they had stopped routing orders to these pools altogether. Turquoise dark pool volume more than doubled that day.[4]

On April 14, 2010, Turquoise unveiled plans to launch trading in U.S. shares including Citigroup, Apple and Alcoa.[5]

On April 21, 2010, the London Stock Exchange said Turquoise would go live on a new Linux-based platform in August or September of 2010. It will move away from the Cinnober Tradexpress platform, which is Java based, and migrate to the MillenniumIT platform, based on Linux and Sun Solaris Unix environments.[6]

On October 20, 2014 Turquoise launched Turquoise Block Discovery, a new service to enhance its existing Midpoint Dark Book. The service is designed to bring together large block orders in a neutral, passive environment. It will be supported from launch by seven major brokers including: Barclays, Instinet, ITG, JP Morgan, Morgan Stanley, Neonet and Societe Generale. Bank of America Merrill Lynch, Citi, Deutsche Bank, and UBS.[7]

Turquoise Derivatives[edit]

In May 2011 Turquoise launched the Turquoise Derivatives platform, a multi-lateral trading facility (MTF) for equity derivatives. The platform began as a joint venture between the London Stock Exchange and twelve investment banks.[8]

Turquoise Derivatives lists equity and equity index futures and options from Norway, Russia and the U.K., including the FTSE 100 and single-stock futures.[9]

The London Stock Exchange agreed to acquire Turquoise Derivatives from Turquoise Global Holdings in July of 2013. The move was in part designed to reduce the costs of the incoming post-trade rules in the European markets infrastructure regulation (EMIR), which requires MTFs to pay higher costs compared to regulated exchanges.[10] Under new regulations, equity derivatives will be considered OTC products, subject to tougher margin requirements than exchange-traded derivatives. The move to full ownership by the LSE will allow banks and customers to more efficiently use capital.[11]

Upon completion of the acquisition, Turquoise Derivatives was renamed the London Stock Exchange Derivative Market.[12]


Turquoise was announced by an initial consortium of seven banks that together account for half of share trading in Europe. The aim was to create a platform which would halve on-exchange trading costs, but the venture was expanded to include dealing in dark liquidity pools, where firms offer to buy and sell large blocks of shares away from public sight.[13]

The seven original backers - Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS - were joined by BNP Paribas and Société Générale.

The Turquoise venture was first outlined in November 2006, nearly a year behind schedule, with the platform expected to become fully operational Sept. 5, 2008. The pace of development saw it nicknamed "Project Tortoise" by some. The exchange received regulatory approval in July 2008 to operate its pan-European trading platform.[14]

The consortium selected Cinnober Financial Technology in October 2007, as its technology provider. This Swedish technology provider, founded by former executives at OMX and SEB (a leading Swedish bank), built MarkitBOAT, the trade reporting system backed by many of the same investment banks that were driving the Turquoise project. Turquoise is looking at a tariff pricing model that has become the basis for the fiercely competitive U.S. market, known as the "maker-taker" model.

European Central Counterparty Limited (EuroCCP), a subsidiary of the U.S. clearing and settlement house, Depository Trust & Clearing Corporation, was formed especially for Turquoise. Initially, it will clear trades in 14 countries using seven different currencies.[15] It is headed by Diana Chan, formerly managing director for market strategy in global transaction services at Citi. Trevor Spanner, the former head of transaction and custody services at Merrill Lynch and a former board member at what was London Clearing House, is COO.[16] In all, 15 firms have gained approval as clearing participants, including Turquoise's nine founding members, plus ABN Amro, Barclays Capital, Credit Agricole Cheuvreux, Instinet, KAS Bank and Lehman Brothers. [17]

The expansion of the platform’s aims led to initial delays, as did the selection of management and the technology provider. A further setback came in October 2007 when it dropped plans to merge with Plus Markets, a London-based exchange that caters to small companies which would have provided Turquoise with a listing.[18] The initial setbacks didn't have a great impact on the project's overall success. The new MTF in Europe was launched quickly after the appointments of Eli Lederman as MD and Cinnober as technology provider.

Turquoise began limited operations at 8 a.m. in London Aug. 15, 2008.[19] Eli Lederman, a managing director at Morgan Stanley responsible for overseeing electronic trading systems in New York and London, was appointed as chief executive.[20]

In October of 2015, LSE announced the exchange would allow dark trading on its lit market, in preparation for a post-MiFID II environment, where dark pool trading will likely be constrained. The new enhancements will go live on 2 November 2015.[21]

The exchange also offers a dark order book on Turquoise, which LSE owns with a group of banks. [22]

Key People[edit]


  1. LSE Unveils Turquoise Acquisition. Press Association.
  2. Former Turquoise chief Eli Lederman sues LSE. The Telegraph (UK).
  3. Turquoise moves to link up ‘dark pool’ liquidity. The Financial Times.
  4. Big swing as Turquoise tops monthly dark trading for first time. The Trade News.
  5. European trading platforms to offer US stocks. The Financial Times.
  6. London Stock Exchange readies Turquoise for Linux migration. ComputerWorld UK.
  7. Turquoise Block Discovery goes live with seven major brokers. London Stock Exchange Group.
  8. Turquoise's Derivatives Mart Launching in May. Securities Technology Monitor.
  9. Turquoise Derivatives. Turquoise.
  10. EMIR rules prompt Turquoise Derivatives reshuffle. The Trade.
  11. Quick View: Emir begins to make its mark. Financial Times.
  12. London Stock Exchange to acquire Turquoise Derivatives. FinExtra.
  13. Exchanges appear ready to go over to the dark side. Financial Times.
  14. Turquoise Granted FSA Approval. Advanced Trading.
  15. DTCC to handle clearing for Turquoise. Financial Times.
  16. Turquoise clearer names chief. Financial Times.
  17. EuroCCP to Launch Clearing & Settlement System Friday. Wall Street & Technology.
  18. Plus pulls out of a merger with Turquoise. Financial Times.
  19. Turquoise Opens Doors. SecuritiesIndustry.com.
  20. Turquoise appoints chief from Morgan Stanley. Financial Times.
  21. London Stock Exchange introduces new MiFID II-ready trading enhancements for block trades. London Stock Exchange.
  22. LSE Brings Dark Pool-Style Trading to Exchange as EU Rules Loom. Bloomberg.

External Links[edit]